PRESIDENT NICOLAS Sarkozy came under attack over his handling of the economy at the weekend as his government fought to contain the damage from the loss of France’s triple-A credit rating.
French voters will choose a new president in April, and the decision by Standard Poor’s to cut France’s rating by a notch was a serious blow to Mr Sarkozy’s electoral strategy as he prepares to enter the campaign.
Mr Sarkozy said he would address the French people at the end of January to tell them of “significant decisions” he would have to take. “The crisis can be overcome provided we have the collective will and the strength to reform our country,” he said.
“We must resist, we must fight, we must show courage, we must remain calm.” The president is due to meet union leaders and employers for talks on Wednesday, and his announcements are expected to focus on initiatives to stimulate growth in the stagnant economy.
Already facing sharp opposition criticism for having done too little to address chronic unemployment and competitiveness, the government recently announced plans to change company labour charges, adopt a financial transaction tax and introduce a “social VAT” to fund welfare.
Mr Sarkozy did not directly address the rating cut by Standard Poor’s during a scheduled event yesterday, leaving French prime minister François Fillon to deal with the fallout. At a press conference, Mr Fillon played down the impact of the downgrade and tried to steer the debate towards European-level moves to improve economic governance.
He ruled out a new austerity package, which would be the third since August, and said France would hold to its commitment to reduce the public deficit below 3 per cent of GDP by 2013. However, he said further “adjustments” could be necessary if growth figures turned out to be lower than predicted.
The Élysée Palace hopes to insulate Mr Sarkozy from the rating cut controversy, but rivals for the presidency kept the focus firmly on the president. Socialist candidate François Hollande, who leads Mr Sarkozy in opinion polls, referred to the year-long public “battle” the president had fought to retain the top rating. “This battle, I regret to say it, has been lost,” Mr Hollande said.
“It’s not France that has been downgraded – it’s a policy, a strategy, a team, a government, a president,” he added.
Recent opinion polls show two candidates – National Front leader Marine Le Pen and the centrist François Bayrou – closing the gap on the two frontrunners.
Both outsiders sought to lay the blame for the downgrade on the two main parties, saying France was paying the price for policies pursued by left- and right-wing governments over several decades.
Ms Le Pen said the news marked “the end of the myth” of Mr Sarkozy as a president who could “protect” the French people and called for withdrawal from the euro.
Mr Bayrou, a former minister in right-wing governments who is standing as leader of the centrist Mouvement Démocrate, claimed there was “dual responsibility” on the right and left for having spent recklessly and driven up the debt.
An IFOP poll last Thursday showed that in the first round of the election in April, Mr Hollande would take 27 percent of the vote, followed by Mr Sarkozy at 23.5 per cent and Ms Le Pen at 21.5 per cent. Mr Bayrou was in fourth place at 13 per cent.
The SP downgrade came against a backdrop of continuing economic gloom. The national statistics office, INSEE, says it expects France to fall into a brief recession, with the economy contracting 0.2 per cent in the three months to December and another 0.1 per cent in the first quarter of 2012.